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Why You Should Not For Sale By Owner

December 31, 2018

In
today’s market, as home prices rise and a lack of inventory continues,
some homeowners may consider trying to sell their homes on their own,
known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for most sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

According to NAR’s 2018 Profile of Home Buyers and Sellers,
95% of buyers searched online for a home last year. That is in
comparison to only 13% of buyers looking at print newspaper ads. Most
real estate agents have an Internet strategy to promote the sale of your
home, do you?

2. Results Come from the Internet

Where did buyers find the homes they actually purchased?

50% on the Internet

28% from a real estate agent

7% from a yard sign

1% from newspapers

The days of selling your house by putting out a lawn sign or
putting an ad in the paper are long gone. Having a strong Internet
strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale by Owner:

The buyer who wants the best deal possible

The buyer’s agent who solely represents the best interests of the buyer

The buyer’s attorney (in some parts of the country)

The home inspection companies, which work for the buyer and will almost always find some problems with the house

The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved
in selling and buying a home has increased dramatically as industry
disclosures and regulations have become mandatory. This is one of the
reasons that the percentage of people FSBOing has dropped from 19% to 7%
over the last 20+ years.

5. You Net More Money When Using an Agent

Many
homeowners believe that they can save on the real estate commission by
selling on their own, but they don’t realize that the main reason buyers
look at FSBOs is because they also believe that they can save on the
real estate agent’s commission. The seller and buyer can’t both save the
commission.

A study by Collateral Analytics revealed
that FSBOs don’t actually save anything, and in some cases may be
costing themselves more, by not listing with an agent. One of the main
reasons for the price difference at the time of sale is that,

“Properties
listed with a broker that is a member of the local MLS will be listed
online with all other participating broker websites, marketing the home
to a much larger buyer population. And those MLS properties generally
offer compensation to agents who represent buyers, incentivizing them to
show and sell the property and again potentially enlarging the buyer
pool.”

If more buyers see a home, the greater
the chances are that there could be a bidding war for the property. The
study showed that the difference in price between comparable homes of
size and location is currently at an average of 6% this year.

Why
would you choose to list on your own and manage the entire transaction
when you can hire an agent and not have to pay anything more?

Bottom Line

Before
you decide to take on the challenges of selling your house on your own,
sit with a real estate professional in your marketplace and see what
they have to offer.